Navigating Cyber Security Challenges in the Insurance Industry

Since the pandemic, cyber attacks have more than doubled. The financial sector including insurance companies are uniquely exposed to cyber risk. Often businesses are targeted by cyber criminals who look to steal money, PII (Personal Identifiable Information) or disrupt activity.

Insurers are concerned about an increase in PII and other sensitive data theft, as cyber crime tops the list for the sector’s key concerns. The theft of sensitive data, while added to phishing and ransomware attacks pose a threat to the insurance sector.

Cyber attacks can have a large impact on business operations, including disruption to daily operations, eroding consumer confidence and trust, as well as starting a chain of events which relates to remediation, legal proceedings, and regulatory fines.

There are a number of cyber security challenges that affect the insurance industry, and ToraGuard discusses these in this article.

Why Are Insurers at Risk of a Cyber Attack

Insurance companies are particularly vulnerable to cyber attacks due to the vast amount of sensitive information they hold. This data could include financial, medical, or other personal details which make them an ideal target for cyber criminals.

Additionally, insurers are the prime target for ransomware attacks. The complex systems used and intricate data processing procedures often present further vulnerabilities for cyber criminals to exploit.

As technology develops, which includes the recent addition of AI, insurers have the opportunity to enhance the way they operate. However these developments open up associated risks to insurance businesses as the roll-out of new technologies requires the user and IT teams to be trained on how to identify and prevent cyber incidents through new devices and software.

Cyber Security Challenges in the Insurance Industry

Insurance organisations benefit from digitisation. It does however come with risk of cyber attacks. A widely reported incident targeted two French companies, who manage third-party payments for health insurance. The breach uncovered the personal data of an estimated 33 million people. This was reportedly the largest data breach in the country’s history.

Cyber crime ranks as the greatest threat facing the global insurance industry. There is a growing list of digital threats facing insurers, which they need to be vigilant about. To ensure security as digitalisation continues to increase, there are a number of cyber security challenges.

Third-Party Risks – Insurers often rely heavily on third-party sources of data, vendors, and partners. In order to deliver a wide range of services, these relationships enhance efficiency and customer satisfaction. However they also introduce significant risks that must be managed proactively.

Cloud Vulnerabilities – Some cyber attacks specifically target insurance companies’ cloud-based systems. Hackers are able to then access PII, disrupt daily operations, or exploit vulnerabilities within business cloud infrastructure. These often include denial-of-service (DDoS) attacks, data breaches, and account hijacking. If this occurs, customer privacy and company reputation is put at risk.

Artificial Intelligence – The introduction of (generative) AI, such as ChatGPT and other large language models (LLMs), means experts expect cyber attacks to become further automated and bespoke. These AI attacks will mean attacks are cheaper and easier to push at scale in multiple languages. Attackers may use AI driven phishing attacks.

However, to combat this additional cyber security risk, AI will also increasingly provide more support to the efforts of cyber defenders. AI can be used to strengthen detection and response capabilities within cyber security teams. The UK government announced a new AI cyber security standard, which provides clear security guidelines for AI developers and organisations deploying AI solutions.

Insider Threats – ‘Insiders’ refer to current or former employees, contractors, or people with authorised access to insurance companies’ IT systems. Whether there’s a disgruntled employee who deliberately steals consumer data, leaks confidential information, or compromises systems due to being unhappy in their role, or an unintentional data breach from negligent workers, insider threats can cause significant risk.

Regulatory Compliance – It is important for organisations within the insurance industry to ensure they are adhering to the recommended guidelines and requirements. These are designed particularly to ensure data is thoroughly protected and to prevent poor data breach processes. This can include identifying their unique requirements, regulations and monitoring further changes within the business.

Outdated Technology, Legacy Systems and Security – Organisations within the insurance industry may continue to use outdated technology or security systems due to not being aware of the many risks associated. Outdated hardware and software can typically be less secure than newer versions which makes them much more vulnerable to data breaches and cyber attacks.

Cyber Security Solutions in the Insurance Industry

The insurance industry faces unique threats to cyber security, and businesses need to understand how to approach each threat as they evolve. Insurance companies should be supported in how to best protect their consumers’ data and sensitive information while adhering to strict regulations.

Insurance businesses should approach their solutions to cyber security to include insurance policies, incident response planning, and monitoring. Adhering to cyber security best practices is a good place for insurance companies to begin, as well as understanding how to manage a security incident should one occur.

ToraGuard understands the challenges faced by insurance companies, and can offer the essential protection required to meet the demands of this industry.